How experts came up with 25p-an-hour rise

Bibs for a young child, a bird feeder for a pensioner, or a one-week self-catering holiday for a family. What people feel is important for them to be able to afford in order to live an acceptable life and join in society varies greatly depending on their circumstances.

And so coming up with one amount per hour which reflects a wage that enables this was a complicated task for Loughborough University academics.

Their research saw the so-called living wage increase this week by 25p to £7.45.

Academics from the university's Centre for Research in Social Policy (CRSP) interviewed 100 focus groups, divided up into people from different socio-economic backgrounds and family situations, such as working couples, single pensioners, families with toddlers and parents with secondary school children.

The groups compiled shopping lists of what they felt was necessary for them to live their lives and participate in society.

Abigail Davis, a senior research associate involved in the study, said: "The living wage is aimed at reflecting the cost of not only basics such as food and accommodation, but what is needed to participate in the community you live.

"Every focus group has had major discussions about what's important to have in their lives and it throws up some very interesting pictures.

"For example, pensioners felt that having a bird feeder enabled them to see nature wherever they lived at a very low cost, so that has been factored into their weekly overheads.

"We have spoken to real people about real life situations and that's why the research is so interesting. Although we're not here to draw our own conclusions, clearly the research can be used to inform debate and future policy.

"People talk about not having enough money, but until you know what enough is, there's only half a picture."

Weekly budget costs for a working couple with a toddler took into account childcare, the price of bibs and even the cost of decongestant.

Meanwhile, a lone parent with a pre-school child, primary school child and secondary school child, had a one week self-catering holiday for the family factored into their budget.

Weekly costs were then broken into daily costs, and from that an hourly rate is calculated.

The research was commissioned by social research charity, the Joseph Rowntree Foundation.

Unlike the minimum wage of £6.19p, which is enforced by law, the £7.45 living wage is voluntary.

Donald Hirsch, director of CRSP, said: "There is a general sense that the minimum wage is not enough and people cannot get an acceptable living standard on it.

"The work we have done in our centre provides solid evidence for that.

"Our research is based not on what experts think people need but on what members of the public tell us in great detail what a family needs to make ends meet. The problem is that even though wages are not going up generally, costs are going up, often faster than inflation.

"Things like food prices have gone up quite a lot in recent years, child care has gone up, social rents have gone up a lot.

"And at the same time, some of the tax credits have been cut back which means you need to earn more than before to get to the same net income."